How much is enough to fix education aid formula?

BEACON HILL IS bracing for what’s likely to be one of the biggest legislative hearings in recent years, as hundreds of advocates, parents, local officials, union leaders, and students are expected to descend on the State House on Friday to push for a revamp of the state’s 26-year-old education funding law.

The formula determining state aid for local school districts involves a complex maze of variables developed as part of the 1993 Education Reform Act. It’s designed to arrive at a level of funding deemed sufficient to provide all students with an adequate education. Criticism of the formula has been mounting for years, with local education officials and state leaders alike agreeing that it has not kept pace with rising costs, particularly for special education services and employee health care premiums.

A 2015 state commission issued a sweeping set of recommendations for revising the formula, and there is growing optimism that this could be the year it finally happens.

The Foundation Budget Review Commission said schools were being underfunded by $1 to $2 billion due to inadequate spending in four big areas: special education, services for English language learners, employee health care costs, and added services for students from low-income households.

Bills filed by Gov. Charlie Baker and leaders in the House and Senate broadly agree on spending increases for the first three categories, but big differences exist in how much they would increase funding for low-income students, with the Senate bill proposing to spend much more to fund services for these students.

Those differences are likely to figure prominently at Friday’s hearing before the Joint Committee on Education.

Under the bill filed by Sen. Sonia Chang-Diaz, districts with the highest concentration of low-income students would receive double the baseline per pupil funding established by the formula, pushing the added payments from about $4,000 to about $8,000. Under the governor’s bill, those payments would go from $4,000 to about $4,800 after the seven-year phase-in he proposed. The House bill, filed by Rep. Paul Tucker, hews closer to Baker’s schedule but leaves open what the increase would be for the most high-poverty districts.

Baker and his education secretary, Jim Peyser, are both expected to testify at Friday’s hearing, as are Chang-Diaz and Tucker. Scores of local officials and superintendents are expected to appear, including Boston Mayor Marty Walsh.

“There is no more waiting. The need is urgent,” said Mary Bourque, superintendent of the Chelsea schools, where she has had make repeated cuts in recent years to after school programs and various “wraparound” services for the district’s high-need student population because of inadequate state education funding.

In Worcester, Brian Allen, chief financial and operations officer for the school department, said the district has eliminated full-day preschool programs and extended school day in several buildings because of the budget squeeze. He said the district has 700 fewer teachers than what’s called under the state formula.

Allen said the governor’s bill would add $11.5 million to the district’s $350 million budget, while the Senate bill mean would mean $73 million in new state aid. To restore the programs that were making a difference for the district, he said, “we need the higher amount to do it sustainably and successfully.”

“We are seriously considering the possibility of legal action if something isn’t done,” Smith said.

Brockton and Worcester officials have threatened to sue the state to force it to reckon with the funding needs of poorer districts.

For Brockton, such a move would represent a return to court. The district sued the state over school funding in the 1970s, a case the Supreme Judicial Court finally ruled on in 1993, a decision that served as a strong prod for the Legislature to pass the education reform law that year that dramatically increased state aid to poorer communities.

Also at play in legislative deliberations will be the method used to determine the number of low-income students in a district. Changes several years ago to the federally-funded school lunch program, which made all students at high-poverty schools eligible for free lunch, have thrown those calculations into doubt.

Schools no longer need to collect family income data for the lunch program, the system that had been used to determine their count of low-income students. The state now relies on tapping a database  of services for low-income families, such as food stamps and Medicaid health coverage, to identify those students. But the count misses homeless students, undocumented immigrants, as well as those who previously qualified for free- or reduced-price lunch but have family incomes that are too high for the stricter eligibility used for state programs.

The administration made some adjustments to the funding for low-income students to try to make up for students not captured under the new approach, but some districts say it hasn’t made up the difference. Bourque said the Chelsea schools serve close to 400 homeless students, 83 of whom are not identified as low-income through the state databases. “That’s about $380,00 in extra money from the state we’re not getting,” she said.

The Senate and House bills say added steps should be taken to identify all low-income students, with the Senate bill authorizing districts to go back to collecting income data directly from families if they want to.

While the funding debate looms large, it’s not the only area where state leaders will need to reach agreement. Baker has joined his funding proposal with calls for new accountability measures designed to drive school improvement in struggling districts.

The most controversial provision would allow state Education Commissioner Jeff Riley to withhold a portion of state education aid to districts with schools that have not adequately implemented state-directed improvement plans in chronically low-performing schools.

“We need to make sure the resources we’re investing are having the greatest impact on kids who need them the most,” Peyser said at the January unveiling of the bill. Peyser emphasized that only funding for administrative functions, not for any classroom services, would be held back under the proposal.

The proposal has been met with strong opposition from teachers unions.

Edward Lambert, executive director of the Massachusetts Business Alliance for Education, said new state money should be tied to new conditions ensuring that it’s reaching the students it’s meant to serve.

“This isn’t about more testing,” he said. “It’s about additional focus on outcomes and transparency to ensure the money follows the student and used appropriately.” Lambert would like to see districts required to provide annual school-based reports on their spending. “It’s not enough to give the money to the districts. We want to make sure it goes to those schools whose students are driving the increase,” he said.

Lambert was one of more than 100 business, civic, and education leaders who signed a letter delivered this week to Baker, House Speaker Robert DeLeo, and Senate President Karen Spilka calling for any funding bill to include measures designed to drive improved outcomes.

Lawmakers took at a run at reworking the funding formula last year, but the clock ran out on the Legislature’s two-year session before House and Senate negotiators could reconcile differences between bills passed by the two chambers.

Another wrinkle that may complicate efforts to win broad buy-in from legislators is the fact that not all districts will see a big funding boost from a revision of the foundation formula. “There are a number of districts that don’t benefit from any of these plans,” said Tom Scott, executive director of the Massachusetts Association of School Superintendents.

Districts without a lot of property wealth to tax, but also without a high population of low-income students who generate added state aid, fall through the cracks under the various formula fixes.

“I consider districts like ours the forgotten suburbs,” said Robert Baldwin, superintendent of the Fairhaven schools. Of the district’s 2,000 students, 28 percent are classified as low-income, far fewer than the 70 or 80 percent in some urban districts. Meanwhile, “we don’t have the capacity like others to just increase the tax base,” said Baldwin. “We’re at a financial and educational tipping point.”

All of the plans would phase new funding in over several years. None of the bills propose new revenue streams to pay for the increased state aid. Baker has said the state can fund his plan without new money, while Chang-Diaz said full funding of her bill would ultimately require new revenue.

State Rep. Alice Peisch, co-chair of the Legislature’s education committee, sounded optimistic that the funding formula debate will finally be resolved this year. “The administration and House and Senate leadership have all indicated an interest in getting this done, so I’m very hopeful we will,” she said.